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International Taxation, the BRICS, and the Brazilian Experience: Tracing Patterns and Drawing Comparisons on Taxation of Business Profits

Citation: Ilarraz, Marcelo Pedroso (2018) International Taxation, the BRICS, and the Brazilian Experience: Tracing Patterns and Drawing Comparisons on Taxation of Business Profits. Doctoral thesis, University of London.

Pedroso Ilarraz - PhD Thesis - IALS - 2019.pdf

Creative Commons: Attribution-No Derivative Works 4.0

The specialized literature identifies a number of factors that influence economic growth, usually centring its attention either on geography, on the integration between rich and poor countries when it comes to international trade, or on institutions. The institutional factor assumes a particular relevance when developing and developed countries face the challenges of taxing income from international transactions. In this context, the question about which jurisdiction would have the taxing right on such an income is the main friction point; then the question on the mechanisms to allocate profits to different taxpayers in different jurisdictions comes into play. In light of this, the thesis addresses the following research question: to what extent can the experience of the BRICS countries in the taxation of business profits provide a different framework for developing countries? It does so by applying a comparative methodology through a functional analysis of the legal systems of Brazil, India, and South Africa. Three research objectives, or sub-questions, guide this research endeavour: (i) to investigate the level of influence of the OECD MC on the compared countries’ tax treaty networks with regards to taxation of business profits (and, as a result, the level of deviation from the OECD MC towards the UN MC); (ii) to analyse whether and to what extent the adoption by developing countries of a transfer pricing regulation that does not entirely mirror the OECD’s one would be convenient for those jurisdictions; and (iii) to consider the building up of an alternative transfer pricing framework derived from the thesis’s findings. The thesis is divided into five substantive chapters. It evolves from a general assessment of the income tax legislation and the tax treaty networks of the compared countries (Chapter 2) to a critical analysis of the provisions dealing with business taxation (Chapters 3 to 5) to, finally, presenting a transfer pricing proposal that could be more beneficial for developing countries (Chapter 6). The chapters dedicated to the analysis of the domestic law and of specific treaty articles (Articles 5 on the permanent establishment concept, Article 7 on attribution of profits to permanent establishments, and Article 9 on taxation of associated enterprises) are structured in a similar way, so that they offer a consistent and coherent comparative framework for the thesis purposes. The research findings show that, while those countries do not adopt a coordinated treaty policy, they deviate from the OECD MC in respect to various provisions, to different degrees.

Creators: Ilarraz, Marcelo Pedroso and
Subjects: Law
Divisions: Institute of Advanced Legal Studies
Collections: Theses and Dissertations
  • September 2018 (submitted)


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